PROCESS COSTING PROCESS COSTING VERSUS JOB COSTING This will be our first video in the process cost series discussing the differences between top costing and process costing. Let us first talk about job costing. As we have talked before in job costing, we can have three different job costing accounts: Job 100, Job 101, Job 102; and each of those jobs will have a certain amount of product cost. Direct material, direct labor, and overhead are what make up our product cost. Once we have completed those jobs, they move into finished goods, we simply sell the job, and it becomes cost of goods sold. Now if you look at this into t-accounts, we see materials move to work in process. Labor (whether it be direct or indirect) are credited to wages payable and are applied to work in process. Remember, our materials and our labor are a direct cost—they are directly traceable to a job. Overhead is applied to work in process, the sum allocation rate we have created based on es...
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